Tuesday, June 24, 2008

Obama and McCain Spout Economic Nonsense

In [last week's] WSJ, Karl Rove observes both John McCain and Barack Obama are proving "that in close elections during tough economic times, candidates for president can be economically illiterate and irresponsibly populist." He criticizes Obama for embracing a Carter-esque windfall profits tax, and McCain for seeking to direct how oil companies invest their own profits. He concludes:

Messrs. Obama and McCain both reveal a disturbing animus toward free markets and success. It is uncalled for and self-defeating for presidential candidates to demonize American companies. It is understandable that Mr. Obama, the most liberal member of the Senate, would endorse reckless policies that are the DNA of the party he leads. But Mr. McCain, a self-described Reagan Republican, should know better.

Rove is not known for his mastery of energy policy or economic principles, but in this case he's right on target.

2 comments:

Karl Rove is responsible for taking the Republican Party from a national party to a largely regional one with its sole base of power in the Southeast. He is an utter disgrace and anything from him should be considered carefully. No one practiced the politics of division moreso than he.

Granted, there are always problems to govt intervention in the economy, but a totally hands off approach does not work perfectly either.

We see that in the mortgage industry meltdown, where a lack of regulatory oversight led to an utter collapse brought on by a range of factors, not the least of which was pure greed on the part of many lenders and investment houses.

We also see that tax cuts are not the answer to everything, esp. when the rewards go primarily to the wealthy. And to no one's surprise these tax cuts do lead to larger deficits, which exact a hidden tax on the American people.

One, I don't know why the WSJ or any media company gives Rove an outlet. He has zero credibility. Remember, this is the man who predicted that he would usher in an era of permanent Republican dominance. Instead, he has driven his party into the ground, where it cannot even win what should be safe Congressional seats in Mississippi or Louisiana. Rove's legacy is a very poor one.

Asking Rove about politics or economics these days would be like asking the captain of the Titanic about how to steer a ship.

Two, I think almost all would agree that in the macroeconomy there are no ideal solutions. The best solutions are a mixture of the free market, some government regulation, and some government taxation. The only question is where those lines are drawn.

Too often Republican critiques of economic proposals act as if all government regulation or taxation is unnecessary. Of course that is utterly foolish unless you want there to be literally no government.

So it's easy to take shots at any tax proposal, or any regulatory proposal. But we've seen that totally unregulated markets do not work, and we should certainly know that at some point we need to pay for our government in the form of taxes.

Indeed, one of the failures of our war in Iraq is that leadership never asked us to pay for it. It is the first war in our history where this is so. If the American people had been asked to pay higher taxes for this venture, perhaps the outcome would have been different. With money comes accountability. When you do not ask the American people to pay you in essence dramatically lessen your accountability.